Can Phoenix millennials afford the very homes designed to attract them?

Skyler Irvine is an Amazon best-selling
author, notable social media marketer and owner of
Myriad Real Estate in Phoenix, Ariz. Irvine began
his real estate career in 2008 buying, selling, renting and flipping foreclosed homes. As a licensed Arizona Realtor, Irvine has since built one
of the most successful and fastest growing real estate teams in the Valley. His new book, “How To Leverage Facebook For Your Real Estate Business” is
now available for digital download on Amazon.com.
Email Skyler Irvine.

According to the National Association of Realtors March 2016 Home Survey, if buying a home in the next 6 months the majority of respondents said purchasing a single-family home would be their top choice. The stat that stands out the most from this report is 53% of respondents under the age of 44 believe it would be “very difficult” to qualify for a mortgage, and 73% believe it to be "somewhat difficult.”

The media and data support this claim with rising student loans and stagnant wages the main culprit. With prices continuing to rise year over year and an increase in urban core community developments in Scottsdale, Tempe and Phoenix, the question is whether millennials can afford to be among the buyers.

In 2015, millennials made up 35% of home buyers nationally, with the majority purchasing new construction in suburban areas. Most new-construction developments provide their own financing to home buyers and are able to provide custom lending requirements that traditional lenders may not.

While these millennials continue to get the media attention, builders are focusing on the 55 and older population looking to downsize and with money to spend. First-floor bedrooms, bathrooms and flex spaces are the hot new trend in many new developments throughout the Valley.

Communities designed to attract Phoenix millennials downtown may have to shift their marketing strategies towards the retiring population with money to spend, lower debt and better credit scores than their millennial counterparts. Replacing them in their big suburban homes might be these Phoenix millennials who are beginning to start families, seek more space and better schools.

Mortgage interest rates have now fallen for two straight months after everyone thought they could not possibly get any lower. In today's current economic climate, this is still not enough to attract borrowers as fear of a recession looms large for many Phoenix millennials.

The only housing market in the Valley which is not seeing growth is the luxury market. Low oil prices and fear of a bear market in stocks historically slows down this market. This is especially true for snowbirds and second-home buyers in Paradise Valley.

As Phoenix enters peak home buying season from March through August, 2016 is already on pace to be the best year in single-family home resales since 2013. Subject to an unknown black swan event, the data continues to suggest steadily rising prices and a healthy real estate economy through the summer.

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